Good morning.
In a recent address, ANZ's Chief Executive Officer Shayne Elliott discussed the impact of COVID-19 on the bank's operations and its strategic response. He acknowledged the challenging times faced by customers, employees, and shareholders due to the pandemic and expressed confidence in ANZ's strategy to navigate through the crisis.
Elliott highlighted that ANZ is in a strong position to support recovery efforts due to its simplified and strengthened structure. He noted that "the three lines of defence in the economy—balance sheets of customers, banks, and the government" have been effective so far.
The CEO reported that despite entering the crisis with significant capacity to withstand losses, statutory profit has decreased by 44%, while cash profit excluding large items fell by 26%. This was attributed to an increase in credit reserves by $1.4 billion among other factors.
Regarding dividends, Elliott stated that "given the significant uncertainty regarding the impact of COVID-19 on the economy," ANZ's board has deferred a decision on paying out interim dividends for 2020 until later this year. He assured stakeholders that "we are not cancelling the dividend" but will reassess later when more information is available.
Elliott outlined ANZ's strategy pivot during this time as focusing on four key areas: protecting important assets, adapting to changes, increasing stakeholder engagement, and preparing for future challenges. The bank has implemented various measures such as rolling out support packages and enabling remote work for most employees since mid-March.
He also emphasized maintaining a prudent approach towards risk management while being prepared for potential short-term dips below their CET1 ratio threshold due to high levels of uncertainty.
In conclusion, Elliott reaffirmed ANZ’s commitment to long-term strategies while acknowledging ongoing uncertainties posed by COVID-19. A trading update is scheduled for August where further decisions regarding dividends will be communicated.